SOLIRIS decision. The Patented Medicine Prices Review Board (PMPRB) announced the release of a hearing panel’s Decision regarding the pricing of Alexion’s SOLIRIS (eculizumab), sold in Canada since 2009.
SOLIRIS is a breakthrough drug indicated for the treatment of paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome, both rare and life-threatening disorders. According to the Board’s Guidelines, as a breakthrough drug, the highest price at introduction (the Maximum Average Potential Price, MAPP) is the median price of the seven comparator countries listed in the Patented Medicines Regulations. In subsequent years, the highest price is the lower of (i) the price from the previous year increased by the Consumer Price Index (CPI) or (ii) the highest price in the comparator countries (the Highest International Price Comparison, HIPC).
The Board considered its consumer protection mandate in determining whether the pricing was excessive according to the factors set out in s. 85(1) of the Patent Act which include: the prices at which the medicine has been sold in the relevant market; the prices at which the medicine has been sold in other countries; and changes in the CPI.
The Panel agreed with the Board Staff that the Guidelines were appropriate in assessing increases, but not in assessing the appropriate benchmark, agreeing with Board Staff that in “the unique circumstances of this case”, the appropriate benchmark was the LIP (the lowest international price), which was the United Kingdom price. The Panel assumed that by selling at the LIP in the UK, Alexion was covering its costs and earning a normal rate of return, found that no justification was provided as to why Canadians should be paying significantly more than in the UK (and the US), and considered the significant impact that the cost was having on the provinces’ health care budget.
The Panel rejected Alexion’s main argument that the Guidelines were not appropriate regarding the permitted increases in subsequent years as the fluctuations in the exchange rates and the appreciation of the Canadian dollar resulted in the Canadian price appearing higher than the international comparators, while the Canadian price remained unchanged, and in fact, decreased based on changes in the CPI. The Panel concluded that foreign prices must be converted to Canadian dollars for comparison purposes; exchange rate fluctuations are the responsibility of the patentee.
The Panel concluded that Alexion was selling SOLIRIS at an excessive price from 2009-2015, as the price exceeded the LIP. While the Panel believed the correct benchmark was the LIP as of the date of first sale, it only required Alexion to comply with this as of the date of the decision, as Board Staff had consistently applied the HIPC test until 2015. For the 2009-2017 period, the Guidelines were to be applied to calculate excess revenues, and the Panel will then issue a further decision, after which Alexion is to make payment.
Alexion has sought judicial review of the Panel’s decision.
Report comparing drug coverage by Canadian public drug plans. On October 11, 2017, the PMPRB announced the publication of a report titled “Alignment Among Public Formularies in Canada - Part 1: General Overview”. The report, based on 2015 data, compares lists of drugs covered by the public drug plans to determine the extent of overlap in drug coverage. The report’s key findings include:
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“There is a reasonably high degree of alignment among public drug plan formularies in Canada.”
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“Alignment among public plans is greatest for multi-source drug listings, which generally have a higher use and lower cost”; and
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“Public plans are less well aligned in their listing decisions for single-source drugs, with more variability for high-cost drugs.”
Apo-Salvent proceeding discontinued. On September 21, 2017, in response to an unopposed request filed by PMPRB staff to discontinue the proceeding, a hearing panel discontinued an excessive-pricing proceeding relating to Apotex’s Apo-Salvent CFC Free (Order). The panel held that it was not in the public’s interest to continue the proceeding because, among other things, it had been on hold for approximately nine years and, given the passage of time, PMPRB staff “would face significant evidentiary challenges” if the proceeding was to continue.
Competition Bureau reaches agreement with Abbott Laboratories
by Urszula Wojtura
On September 28, 2017, the Competition Bureau announced it has reached an agreement with Abbott Laboratories that resolves the Bureau’s concerns related to Abbott’s proposed acquisition of Alere Inc. The Bureau had concerns that the acquisition could result in a substantial lessening of competition in the supply of certain types of medical diagnostic testing products. To resolve these concerns, Abbott agreed to the sale of some of Alere’s diagnostic systems to two separate companies. Given the global nature of the proposed acquisition, the Competition Bureau coordinated its review with other jurisdictions, including the European Commission and the US Federal Trade Commission. The Bureau determined that the sales of Alere’s diagnostic systems to two other companies will preserve competition in Canada.
Federal Court rejects application for judicial review for Apotex’s omeprazole magnesium tablet submission
by Katie Lee
In a decision dated September 25, 2017, Justice Roy rejected Apotex’s judicial review regarding Health Canada’s review of Apotex’s omeprazole magnesium tablet regulatory submission: Apotex Inc v Canada (Health), 2017 FC 857. Apotex originally filed its Abbreviated New Drug Submission (ANDS) in 2000 and its submission was put on patent hold, which was later revoked because the ANDS lacked a high-fat study. Apotex re-submitted an ANDS in 2013 with a high-fat study. The Minister issued a Notice of Non-Compliance on the basis that the high-fat study did not meet the standards for bioequivalence and that the study protocol was inadequate. Apotex applied for reconsideration. The Director cancelled reconsideration due to a disagreement on an eligible question to pose to the Reconsideration Panel. Apotex focused the question solely on safety and efficacy, while the Minister required that the question consider bioequivalence. Apotex sought judicial review of the Director’s decision to cancel reconsideration.
The Federal Court dismissed the application, finding that (1) Apotex’s legitimate expectation was the opportunity to draft a question eligible for submission to the Reconsideration Panel, which Apotex had fair opportunity to do, and (2) the Minister of Health was required by the Food and Drug Regulations to consider bioequivalence in assessing safety and efficacy and had no discretion to do otherwise, therefore her discretion was not fettered. Apotex has appealed.
Federal Court of Appeal declares that administrative errors during application cannot void an issued patent
by Kevin Siu
The Federal Court of Appeal ruled that the failure to pay the correct issue fee did not render a patent void: Apotex Inc v Pfizer Inc, 2017 FCA 201. In the context of a s. 8 case relating to latanoprost (XALATAN), Apotex brought a partial summary judgment motion to have Pfizer’s Patent No 1,339,132, which Pfizer relied on in its defence, as void for failure to comply with s. 73 of the 1989 Patent Act. The Court of Appeal dismissed Apotex's appeal of the Federal Court’s decision (reported here) and stated the general principle that "pre-patent issuance defects in the administrative process for applying for a patent cannot be relied upon by an alleged infringer to render a patent void".
New Court Proceedings
For complete details about these pharmaceutical proceedings, click here.
rituximab (RITUXAN): Hoffmann-La Roche v Celltrion
abiraterone acetate tablets (ZYTIGA): Janssen v Teva
bevacizumab (AVASTIN): Pfizer v Genentech, F Hoffmann-La Roche
Selected Rankings
Canadian IP Impact Case of the Year
AstraZeneca v Apotex (NEXIUM)
LMG Life Sciences
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Canada’s Intellectual Property Litigation Firm of the Year
Benchmark Canada
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